However, Members of European Parliament (MEPs) decided against passing the measure in the Undertakings for collective investment in transferable securities (UCITS) V directive.

Sharon Bowles MEP, chair of the European Parliament’s Economic and Monetary Affairs Committee, said: “I have always maintained that banks have a monopoly on liquidity and lending, both of which are ultimately provided at public expense.

“For this reason, I do not think it is appropriate to roll out the same bonus cap across all financial services legislation. However, we should all know how managers are being paid so that there are not wrong incentives.”

Alex Beidas, an employee incentives lawyer at Linklaters, added: “The flurry of lobbying in the last few days has paid off.

“This is good news for UCITS fund managers, but will also give other sectors comfort because there has been a concern that the Alternative investment fund managers directive would be amended to apply the cap to hedge funds and private equity firms, and that the Shareholder rights directive could apply a cap to listed EU companies.

“Today’s result may lead EU lawmakers who are in favour of applying the cap to a wider group than banks to think again.”